The Dow Jones industrial average moved up 96 points to finish at 10,562.30.
"We have finally come to the point where we have a price-news divergence, meaning stocks don't go down on bad news," said Arthur Hogan, chief market strategist at Jefferies. "That is typical of a (market) bottom."
Intel moved up $1.06 to $30.38, while Advanced Micro Devices and IBM gained $1.39 and $2.61 a share, respectively.
Two more chipmakers warned of slowing sales growth as Vitesse Semiconductor and LSI Logic reduced forecasts for their upcoming quarters, blaming continued weakness from communications and data-storage customers. Vitesse shares closed up $1.25 to $39.06, and LSI rose 51 cents to $16.82.
The economic slowdown has also trickled down to Cypress Semiconductor, which said it would fall short of revenue expectations for the first quarter. The stock gained 27 cents to $19.13.
Juniper Networks added $5 to $58.63 even though USB Warburg cut its 12-month price target from $250 a share to $100 a share. Cisco Systems moved up 89 cents to $23.08, while Lucent Technologies and Nortel Networks picked up 35 cents and 37 cents a share, respectively.
Among widely held PC stocks, Dell Computer rose $1.38 to $23.44; Apple Computer picked up $1.13 to $20.38; Gateway tacked on 62 cents to $16.07 and Compaq Computer finished up 7 cents to $20.07.
Amazon.com closed up $2.63 to $12.63 on speculation it would strike a deal with Wal-Mart, off 55 cents to $48.37.
AOL Time Warner rose $1.74 to $43.80, and Yahoo gained 50 cents to $22.19. eBay added 31 cents to $38, and CMGI finished up 9 cents to $4.06.
Microsoft rose 75 cents to $57.44. Oracle picked up 13 cents to $17, and Sun Microsystems closed up $1.31 to $20.94.
Staff and Reuters contributed to this report.